As we previously reported here, in 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) changed the pay data reporting requirements under the EEO-1 report, requiring employers with 100 or more employees to annually report employees’ IRS Form W-2 compensation information and hours worked. However, in 2017, following President Trump’s election, the OMB indefinitely stayed the deadline for employers to comply with the Obama-era revisions to the EEO-1 form, pending review of the potential burdens of such data collection under the Paperwork Reduction Act. (See our prior post here).

The stay remained in place until Judge Chutkan of the U.S. District Court for the District of Columbia released her March 4 order rejecting the OMB’s decision to stay the pay data collection requirement. The court reasoned that the OMB failed to prove either that relevant circumstances regarding the data collection had changed, or that the original burden estimates were materially in error. Further, the court held that the stay was arbitrary and capricious. Therefore, the judge ordered that “the previous approval of the revised EEO-1 form shall be in effect.”

The order leaves many open questions concerning how or when employers will be required to respond. The EEOC’s EEO-1 survey will open on March 18, 2019, and the deadline to submit EEO-1 data has been extended to May 31, 2019. It is still unclear whether the EEOC will require employers to submit the pay data information on that deadline, or if the pay data reporting will begin in a future filing cycle. Also, an appeal of the judge’s order lifting the stay is likely, and with that appeal could come a reinstatement of the stay. As this issue is ongoing, we will keep you updated as more developments arise.

On January 17, 2019, New Jersey’s governor and state legislators agreed to a deal that will raise the state’s minimum wage to $15.00 by 2024. The current minimum wage in New Jersey is $8.85 an hour. Under the new law, the state’s minimum wage will increase to $10.00 an hour on July 1, 2019, and to $11.00 on January 1, 2020, with a steady one-dollar increase occurring every January 1 until 2024.

In addition, on February 19, 2019, Illinois’s governor signed a law that will raise the state’s minimum wage to $15.00 by 2025. The current minimum wage in Illinois is $8.25 an hour, but under the new law it will increase to $9.25 an hour on January 1, 2020, and $10.00 on July 1, 2020. The minimum wage will then increase by one dollar per year every January 1 until 2025.

Further, the City Council of Fremont, California unanimously voted to increase its minimum wage to $15.00 per hour by July 1, 2020 for employers with more than 26 employees and July 1, 2021 for employers with 25 of fewer employees. Similarly, Pasadena, California’s City Council voted to raise the city’s minimum wage to $15.00 an hour by July 1, 2020 for larger employers and July 1, 2021 for smaller employers.

Lastly, on March 1, 2019, the minimum wage in both the city and county of Santa Fe, New Mexico increased to $11.80 per hour.

Michigan Paid Sick Leave

As we previously reported here, Michigan’s new Paid Medical Leave Act is scheduled to go into effect soon. Employers with non-exempt employees working in Michigan have until March 29, 2019 to get their policies and recordkeeping systems ready for the new law.

New York City Prohibits Hair Discrimination; Requires Employers to Provide Lactation Room

The New York City Commission on Human Rights recently released legal enforcement guidance regarding race discrimination on the basis of hair. The guidance specifies that New York City employers with four or more employees cannot discriminate against Black employees by prohibiting “twists, locs, braids, cornrows, Afros, Bantu knots, or fades which are commonly associated with Black people.” Further employers cannot have grooming policies that require employees to alter the state of their hair to conform to the company’s appearance standards (including requiring employees to straighten or relax their hair), and policies cannot ban hair that extends a certain number of inches from the scalp, thereby limiting Afros. Covered employers that choose to enact grooming or appearance policies should be aware that they cannot prohibit or discourage such hairstyles, either explicitly or implicitly, and cannot discriminate against and/or harass Black employees based on their hair texture or hairstyle.

As we previously mentioned here, effective March 18, 2019, New York City employers with four or more employees must provide a sanitary “lactation room” for employees needing to express milk. The room cannot be a restroom, and both the lactation room and a refrigerator suitable for breast milk storage must be within a close proximity to the work area of the employee using it. The lactation room must have an electrical outlet, a chair, a surface on which to place a breast pump and other personal items, and nearby access to running water. Further, by the same date, covered New York City employers must implement a written lactation accommodation policy, which must state that employees have the right to request a lactation room and identify the process for requesting a lactation room.

New Jersey Expands Employee Leave and Benefits Laws

On February 19, 2019, New Jersey’s governor signed Assembly Bill 3975, which significantly broadens the reach of the New Jersey Family Leave Act (“NJFLA”) and the New Jersey Temporary Disability Benefits Law (“NJTDBL”). This new law imposes additional obligations on smaller employers who were previously exempt from the NJFLA. Moreover, the law amends the state’s Security and Financial Empowerment (“SAFE”) Act by granting paid family temporary disability leave benefits for covered time off involving domestic and sexual violence.

The new law extends coverage of the NJFLA to employers of 30 or more employees beginning June 30, 2019 (previously only covered employers with 50 or more employees). Additionally, the following changes to the NJFLA are effective immediately:

The law expands the once restrictive definition of “family member” to also include parent-in-law, sibling, grandparent, grandchild, domestic partner, or any other blood relative as well as any other individual with which the employee has a close, family-equivalent relationship; the new definition matches that in other New Jersey leave laws;

The law revises the definitions of “family leave,” “child,” and “parent” to provide broader protections for foster parents and people who become parents through a gestational carrier;

The law broadens the leave period for employees taking reduced-schedule FLA leave from 24 consecutive weeks to 12 consecutive months; and

The law requires employers to allow employees to take intermittent leave for birth or adoption of a child, placement of a foster child or the birth of a child via a gestational carrier.

Further, the new law expands the monetary benefits that are available under the NJFLA and the NJTDBL for leaves beginning on or after July 1, 2020. First, the law will increase the number of weeks for which benefits are available from 6 to 12 weeks in any 12-month period, and will increase the amount of intermittent leave available for covered employees from 42 to 56 days. In addition, employees who take leave under the NJTDBL will be entitled to 85% of their average weekly wage, subject to a maximum of $860 per week.

Finally, as the new law provides for penalties for failure to post required notices and provides money for public outreach to inform employees of their rights, New Jersey employers should promptly review and update their leave policies to comply with these new requirements.

]]>https://www.employmentlawworldview.com/state-law-round-up-minimum-wage-hikes-il-nj-ca-nm-michigan-paid-sick-leave-new-york-employee-rights-new-jersey-leave-and-benefits-expansion-us/feed/0shennan.harris@squirepb.com, melissa.legault@squirepb.comDéjà Vu All Over Again: U.S. Department of Labor Previews New(-ish) FLSA Overtime Exemption Requirements (Again)https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/
https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/#respondThu, 07 Mar 2019 23:26:22 +0000https://www.employmentlawworldview.com/?p=7354Continue Reading]]>For years – spanning two Presidential administrations – employers have been awaiting long-anticipated updates to the overtime exemption regulations to the Fair Labor Standards Act (FLSA). Since 2004, to be exempt from the FLSA’s overtime compensation requirements under the so-called “white collar” exemptions (e.g., executive, administrative, professional employees), employees must be paid on a salary basis at least $455/week as well as perform specific, defined exempt duties. In 2016, during the latter stages of the Obama administration, the Department of Labor announced that it was implementing new regulations that would raise the salary threshold requirement to $913/week, a substantial increase that would have resulted in as many as four million exempt workers being reclassified to non-exempt overnight. But on November 22, 2016, shortly after the Presidential election, a federal district court judge in Texas enjoined the new salary threshold rule and, despite some further (and still ongoing) appellate skirmishing, effectively invalidated its implementation.

Since then, employers have looked to the present administration wondering whether, when, and to what extent the FLSA regulations may change. After much speculation, the Department of Labor released on March 7, 2019 a proposed rule to amend the overtime regulations. Under the proposed rule, workers who earn less than $679 per week ($35,308 per year) would be automatically eligible for overtime for all hours worked beyond 40 hours per workweek. This is an increase from the current threshold, but not as high as the threshold proposed by the Obama administration. Further, the salary threshold would be revisited every four years through new proposed rulemaking, rather than subject to an automatic annual lockstep increases as the Obama administration had endorsed.

The new proposed threshold incorporates methodology used in 2004, under the Bush administration, for determining which workers should, based on wages alone, be treated as overtime-eligible, but has been adjusted to reflect current average wages. Because the methodology has survived scrutiny for so many years, the new proposed rule may be less susceptible to judicial challenge for overreach than the Obama-era proposal. And, although not as sweeping as the prior proposed rule, if enacted, the amended regulations may result in as many as one million workers becoming overtime-eligible. There is no anticipated change to the duties tests, so reclassification – if any – will be based on salary alone. After a period of notice and comment rulemaking, a final version is expected shortly before the 2020 election. We will continue to update you as the rule advances and if and when it is adopted, along with advice on how to implement cost-effective business solutions to minimize the added costs associated with this change.

]]>https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/feed/0laura.robertson@squirepb.comDepartment of Labor Says Employers Are Not Required to Pay Tipped Employees the Full Minimum Wage for Non-Tipped Activities (US)https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/
https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/#respondTue, 19 Feb 2019 23:50:00 +0000https://www.employmentlawworldview.com/?p=7328Continue Reading]]>Under the Fair Labor Standards Act (“FLSA”), employers are required to pay non-exempt employees a minimum hourly wage of $7.25. However, employers with “tipped employees” are able to pay such employees a cash wage of $2.13 per hour and take a “tip credit” toward their minimum wage obligation to make up the difference between the cash wage and the federal minimum wage. Importantly, the FLSA differentiates between tipped employees who perform “dual tasks,” such as incidental duties that do not produce tips, and employees who have a “dual job,” meaning they are employed by the same employer to do both a tipped job and a non-tipped job. The U.S. Department of Labor’s Wage and Hour Division (“WHD”), charged with enforcing the FLSA, recently changed its position on when employers must pay employees with “dual tasks” the full minimum wage for time spent on non-tipped activities.

On November 8, 2018, WHD issued an opinion letter stating that employers are allowed to pay tipped employees a tipped wage less than the federal minimum wage for hours spent on non-tip-producing duties that are incidental to their main job. Previously, the WHD operated under an Obama administration mandate known as the “80/20” rule, which required employers to pay tipped workers the full minimum wage for time spent on side-work duties that do not result in tips (such as filling saltshakers and rolling silverware) when those duties make up at least 20 percent of the worker’s weekly hours. WHD’s Department’s November 2018 opinion letter altered this policy, explaining that employers are not required to pay tipped employees minimum wage for hours spent on non-tip-generating work incidental to their main job.

On February 15, 2019, WHD issued two new guidance documents supporting the position outlined in the November 2018 opinion letter. First, it revised its internal Field Operations Handbook (at section 30d00(f)) and updated its website to be consistent with its new enforcement policy. In addition, it released Field Assistance Bulletin 2019-2, which explains WHD’s reasons for the policy change, among them, that the previous policy created confusion regarding whether federal law requires certain related, non-tipped duties to be excluded from the tip credit. Further, the bulletin states that the new interpretation applies to investigations both prospectively and retroactively, meaning that the change could impact ongoing litigation between tipped workers and their employers.

WHD’s new policy likely will provide more clarity for employers with tipped workers. However, it is important for these employers to remember that they are still prohibited from keeping tips received by their employees, regardless of whether the employer takes a tip credit under the FLSA. Further, employers are still required to make up the difference if an employee’s tips combined with his or her direct (or cash) wages do not add up to the minimum hourly wage of $7.25 per hour. Finally, this policy clarification applies only to interpretations of the FLSA; state minimum wage laws may differ, so employers are encouraged to consult with local counsel to ensure that they are compliant with both federal and state wage payment laws.

]]>https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/feed/0melissa.legault@squirepb.com, laura.robertson@squirepb.comEyes and Ears on the FLSA – U.S. Department of Labor Issues New Opinion Letters and Schedules Public Listening Sessions (US)https://www.employmentlawworldview.com/eyes-and-ears-on-the-flsa-u-s-department-of-labor-issues-new-opinion-letters-and-schedules-public-listening-sessions-us/
https://www.employmentlawworldview.com/eyes-and-ears-on-the-flsa-u-s-department-of-labor-issues-new-opinion-letters-and-schedules-public-listening-sessions-us/#respondWed, 05 Sep 2018 16:15:13 +0000https://www.employmentlawworldview.com/?p=6997Continue Reading]]>On August 28, 2018, the Wage and Hour Division of the United States Department of Labor (“WHD”) issued four new opinion letters interpreting various aspects of the federal Fair Labor Standards Act (“FLSA”). In addition, the WHD has announced plans to analyze and consider changes to the FLSA’s white collar overtime exemption regulations applicable to executive, administrative, professional, and outside sales employees. To support this effort, the WHD has scheduled five public listening sessions in various locations across the country (a list of which you can find here), which it invites the public to attend and provide comment. The key questions to be addressed at these sessions surround the pros and cons of adjusting the salary basis – the salary level employees must meet in order to be deemed exempt under the white collar overtime exemptions. We will be sending representatives and encourage you to contact us with any questions or feedback you would like us to raise at these sessions.

Regarding the opinion letters, as you may recall from our prior blog posts (for example, here and here), the WHD resumed issuing opinion letters in mid-2017. Opinion letters are official written interpretations of the FLSA, as those laws apply in specific factual situations. Although the opinion letter topics are generally brought to the WHD by a specific person or entity, as you will see from below, many of the situations they present have broader applicability to a range of employers. Keeping abreast of the WHD’s opinions can help employers avoid the pitfalls embedded in the nuances of the laws it enforces. Below is a summary of these new opinion letters, and a link their text:

Voluntary employer-sponsored wellness events not compensable time under the FLSA. Employees who voluntarily participate in employer-sponsored wellness activities, such as biometric screening, health and gym classes, or benefits fairs that are designed to lower an individual employee’s health insurance policy premiums and provide other benefits to employees that does not relate to the performance of their job, and from which the employer obtains no financial benefit, predominately benefit the employee, therefore they are not compensable work time under the FLSA.

Non-profit professional credentialing organization graders are “volunteers” under the FLSA. A non-profit organization who administers professional exams necessary for professional credentialing selects a group of its credentialed members to serve as exam graders for a period of 1 or 2 weeks, whereby they travel to testing locations to perform these services. The organization pays the direct expenses related to the graders’ travel. Graders report they perform the services willingly in the effort to give back to their professional community and to the credentialing organization. Under the FLSA, individuals who provide services to non-profit organizations may be properly classified as volunteers if they offer their services willingly without any expectation of compensation, free from any coercion or undue pressure. Under the circumstances presented by the credentialing organization employer, exam graders meet this standard and can be unpaid volunteers.

Internet payment software platform sales employees may be exempt from FLSA overtime. Employees may not be entitled to overtime if they 1) work in retail or service establishment, 2) earn a regular rate of pay that is more than 1 ½ times the applicable minimum hourly wage in a given workweek in which they work overtime, and 3) derive more than half of their earnings from sales commissions. This is known as the “retail and service establishment” exemption to the FLSA’s overtime provisions. The WHD found that an employer whose business is selling internet payment software platforms to retailers and others who sell products online, was considered a “retail sales entity” because it sold its platform directly to the user, in small quantities, for the user’s own use in business, rather than re-sale (such as wholesale sales). This was not changed by the fact that the employer’s sales are made predominately online. Accordingly, the organization’s employees who meet the earnings requirements above may be exempt from overtime.

Movie theater overtime exemption applies to in-theater-restaurants. The FLSA exempts from overtime all employees of establishments that are primarily engaged in the exhibition of motion pictures (the WHD defines “primarily engaged” to mean at least 50% of the available operation time is spent showing movies). The exemption applies to all employees of a qualified establishment, regardless of the work they perform. This recent opinion letter clarifies that movie theaters with in-theater dining, and even some with onsite, full-service restaurants, may qualify for the movie theater exemption if the food service is “functionally integrated” with the theater operations. Based on the facts presented in the letter, movie theaters with in-theater dining will qualify for this exemption if the food service and theater operations share common: 1) physical premises without a distinct barrier or separation; 2) business, financial, and other record keeping, such as entity name, taxes, and payroll; and 3) employees, and their primary source of revenue is showing movies.

On July 26, 2018, the California Supreme Court ruled in Troester v. Starbucks Corporation that the federal de minimis doctrine does not apply to a California employee’s class action wage claims. This ruling will have widespread impact, particularly on those employers with large numbers of non-exempt employees such as retailers and food service providers, as employers are now required to pay employees for even the small amounts of time spent on incidental work that occurs prior to clocking in or after clocking out.

The employee in Troester, a non-exempt Starbucks supervisor, argued that Starbucks should pay him for the roughly 4 to 10 minutes each day he spent on tasks related to closing the store after clocking out. These tasks included activating the alarm, exiting the store, locking the front door, walking coworkers to their cars pursuant to Starbucks’ safety policy, and other occasional tasks such as letting an employee back into the store to retrieve a forgotten item. The Court noted that over the 17 month period of employment, Troester’s time spent performing these unpaid tasks totaled approximately 12 hours and 50 minutes or about $102.67 in lost wages.

Starbucks argued that the federal Fair Labor Standards Act’s de minimis doctrine applied to this case and excused Starbucks’ nonpayment of wages for these small amounts of otherwise compensable time. The Court first rejected Starbucks’ argument, finding that the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders had not adopted the federal de minimis doctrine. In support of its findings, the Court pointed to the language contained in these statutes and regulations which emphasize that hours worked includes “all the time the employee is suffered or permitted to work.” By emphasizing that it includes “all” time, the Court found that California law is more protective than federal law when it comes to payment of wages.

Second, the Court rejected Starbucks’ argument that the Court should recognize the de minimis rule in light of the fact that it is part of the “established background of legal principles” upon which the Labor Code and IWC wage orders have been enacted. In its ruling, the Court found that the Labor Code and the IWC wage orders are clearly concerned with small amounts of time given that employees receive 10 minute rest breaks. Along with this observation, the Court noted that it implicitly rejected a de minimum intrusion of such time in Augustus v. ABM Security Services, Inc. The Court also found support for its holding because the IWC wage orders amended its language demonstrating an intent to depart from the federal standard for waiting time and other forms of travel time. The federal Portal-to-Portal Act relieves employers from paying minimum wages or overtime for certain activities such as walking to the actual place of performing the principal activity for the employer and other preliminary or postliminary activities. In response, the IWC amended its wage orders such that hours worked included these activities. In doing so, the Court found that the IWC intended for employers to pay employees for these small amounts of time. Finally, the Court noted that the modern availability of class action lawsuits and technology advances in employer timekeeping methods both undermine the de minimis doctrine.

This case will spark a new wave of California class action lawsuits focusing on those previously uncounted minutes and perhaps even seconds of time worked by an employee. With this risk of increased exposure, employers should review their timekeeping policies and procedures. Employers should also analyze each non-exempt employees’ duties and responsibilities and minimize the risk of any off-the-clock work.

As we blogged earlier this year, in March 2018, the United States Department of Labor (DOL) announced a new program, referred to as PAID (or, Payroll Audit Independent Determination), under which employers may voluntarily apply for DOL assistance in resolving potential claims for wage underpayment under the federal Fair Labor Standards Act (FLSA). As previously discussed in our blog post, this pilot program will last six months, during which time the DOL will analyze how well the program meets the DOL’s desired goals, which include seeking to resolve wage claims faster, more thoroughly, and more cost effectively.

The DOL began accepting applications for the program on April 3, 2018. Also on that date, the DOL posted additional details on its website about the program. Some of the key points are:

The application process begins on the DOL website and requires employers to first participate in an on-line review of FLSA compliance materials. To gain access to these materials, employers must provide identifying information, including company name.

The DOL states that applicants not accepted into the program will not become subject to DOL investigation as a result of the information provided in the application unless there is a “health or safety risk.”

The DOL anticipates applicants will have a final claims determination within 90 days. Any employees to whom the DOL determines back wages are due must be paid by the end of the employer’s next pay period following the determination.

Any back wages owed to former employees that cannot be located will be sent to the United States Treasury.

Employers who participate in PAID but choose to privately resolve any related wage claims outside of the DOL process will not be able to obtain effective waivers of those employee’s FLSA claims, as such waivers require DOL approval.

Employers cannot resolve state wage claims simultaneously through PAID but may seek to resolve those claims separately with each employee.

Records pertaining to the PAID program, including applications and resolution documents, are not confidential and may be subject to the same Freedom of Information Act requests (and defenses) as other DOL investigation documentation.

Despite these clarifications, many employers are understandably wary about participating in the PAID program. As we mentioned previously, employees are not required to accept wage payments offered by employers through the PAID program, and may instead choose to pursue their federal claims in court, and thereby seek additional financial remedies. Employers also are concerned that notification to employees of past federal wage law violations may trigger mirrored claims against them under applicable state laws, which may have longer statutes of limitations than the FLSA’s two-year or three-year filing periods (e.g., state wage claims in New York and California, respectively, have six-year and four-year limitations periods). In any event, employers are advised to consult with legal counsel before engaging in an internal wage audit, which will help ensure the audit’s accuracy, legality, as well as allow employers to seek privileged legal advice on these issues.

]]>https://www.employmentlawworldview.com/us-dols-voluntary-wage-underpayment-reporting-program-paid-now-underway/feed/0daniel.pasternak@squirepb.comU.S. Department of Labor Announces New Pilot Employer Self-Reporting Program To Address Overtime and Minimum Wage Violations (US)https://www.employmentlawworldview.com/u-s-department-of-labor-announces-new-pilot-employer-self-reporting-program-to-address-overtime-and-minimum-wage-violations-us/
https://www.employmentlawworldview.com/u-s-department-of-labor-announces-new-pilot-employer-self-reporting-program-to-address-overtime-and-minimum-wage-violations-us/#respondThu, 08 Mar 2018 19:09:05 +0000https://www.employmentlawworldview.com/?p=6503Continue Reading]]>On March 6, 2018, the U.S. Department of Labor (“DOL”) announced a new, nationwide pilot program which it claims will facilitate quick and efficient resolutions of Fair Labor Standards Act (“FLSA”) minimum wage and overtime violations by allowing employers to promptly pay back wages to employees and at the same time avoid time consuming litigation and fines. Cleverly named the PAID program (which stands for Payroll Audit Independent Determination), it will permit employers to self-report if they believe they have made errors in wage payments to employees under the FLSA. The DOL’s Wage and Hour Division will then assess the potential violations to determine how much the employer owes in back wages, and oversee the payments to any current or former employees to whom these payments are owed.

Under the program, employers will be expected to pay 100% of all outstanding wages owed. In other words, the PAID program does not provide an opportunity for employers to reach a compromise with employees on disputed wage claims. However, employers who participate in the program and resolve outstanding underpayments will be exempt from paying liquidated damages (which under the statute are an amount equal to the wage underpayment), penalties, and attorneys’ fees, which can often result from an enforcement action for FLSA violations.

Wage underpayments that are resolved through the PAID program will be considered final, and employees who elect to participate will be required to waive their rights to private legal action for the period of time addressed by the program. (There remains an open issue, however, as to whether the waiver will be as to all potential back pay claims, including those that could be brought under state law, or only under the FLSA.) However, employees are not required to resolve their wage underpayments through the PAID program, and they may choose to forgo any payments offered and thereby retain their private right to action against the employer (including any right to penalty payments). Furthermore, participation in the program will not foreclose a subsequent DOL investigation into an employer’s pay practices for other periods of underpayment not resolved through the program. Wage claims already subject to threatened or existing litigation, or under DOL investigation, may not be resolved through the PAID program, however, those employers may self-report about other potential violations not involved in those disputes.

Critics of the program express concern that employees will not get their statutorily-owed remedies, however, the DOL counterargument is that the PAID program serves to encourage employer compliance with the FLSA and ensure employees are promptly paid all wages owed. Secretary of Labor Alexander Acosta emphasized the PAID program serves to encourage employers to remedy existing underpayments to their employees, who without this program have no way of ensuring such resolutions without risking the potential of a legal battle and significantly more expense.

The program is only temporary at this point; it is set to last, initially, for just six months. At the end of this period, the DOL has said it will evaluate the program’s success and determine whether to continue it in the current or some modified form in the future. The program does not have an official start date, but check back here on our blog for updates once the DOL releases additional information. You may also subscribe here to receive email updates directly from the DOL.

]]>https://www.employmentlawworldview.com/u-s-department-of-labor-announces-new-pilot-employer-self-reporting-program-to-address-overtime-and-minimum-wage-violations-us/feed/0daniel.pasternak@squirepb.comCalifornia Federal Court Finds That “Gig Economy” Workers Are Independent Contractors, Not Employees (US)https://www.employmentlawworldview.com/california-federal-court-finds-that-gig-economy-workers-are-independent-contractors-not-employees-us/
https://www.employmentlawworldview.com/california-federal-court-finds-that-gig-economy-workers-are-independent-contractors-not-employees-us/#respondWed, 14 Feb 2018 18:08:04 +0000https://www.employmentlawworldview.com/?p=6432Continue Reading]]>Uber, Lyft, Airbnb, Postmates, DoorDash. All are companies participating in what has been labeled the “gig economy,” where tasks are performed by workers on a short-term or freelance basis rather than through long-term or permanent employment. As more people participate in this new, mostly smartphone application or Internet-based work model, litigation has followed centering on whether those performing the work are independent contractors or are employees. The ramifications of gig workers being classified as employees rather than contractors are substantial; not only would it likely upend the economic model of most gig economy businesses, classifying gig workers as employees would mean that federal, state, and local employment laws – such as those relating to minimum wage, overtime compensation, workers’ compensation, protection against discrimination, tax withholdings, etc. – would apply where, as of now, they currently do not.

In one of these cases involving the employee versus independent contractor issue, a California federal judge ruled on February 8, 2018 that drivers for GrubHub, Inc. – a restaurant meal delivery service – are independent contractors and not employees. The ruling in Lawson v. GrubHub Inc., No. 15-cv-05128, U.S. District Court, Northern District of California, is being hailed as an important victory for gig economy companies.

In this case, the judge ruled for Grubhub largely because the question of whether the plaintiff, Lawson, was an employee turned on how much control GrubHub exerted over the work life of its drivers. The company argued that Lawson decided when, where, and how frequently he performed door-to-door deliveries, and thereby controlled not only when he worked, but also how much he earned. Mr. Lawson alleged that GrubHub misclassified him as an independent contractor in violation of California’s minimum wage, overtime, and expense reimbursement laws. The judge however found that although some factors weighed in favor of concluding that Lawson was an employee of GrubHub, the balance of factors weighed against an employment relationship, concluding that Lawson was instead an independent contractor.

The court’s decision was guided by the California Supreme Court’s multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), which focuses on “whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Among other things, the court found that Grubhub did not control how Lawson made the deliveries he decided to make or even his appearance when providing delivery services. GrubHub also did not require Lawson to undergo any training nor did it control when or where Lawson worked – that is, Lawson had complete control of his schedule and territory. And, Grubhub did not control how or when Lawson delivered the restaurant orders he chose to accept. Whereas GrubHub controlled some aspects of Lawson’s work, such as determining the rates he would be paid, the court gave those minimal weight. The court concluded that “the right to control factor weighs strongly in favor of finding that Mr. Lawson was an independent contractor.”

The celebration by California gig economy companies may however be short-lived. The California Supreme Court is expected to rule soon in a pending employment case in a way that is likely to upend the Borello standard. Two days before Judge Corley ruled in Grubhub, the justices of the state’s high court heard argument in Dynamex Operations v. Superior Court of Los Angeles concerning whether to replace the Borello standard with a test that would make it easier for workers to show that they are employees rather than independent contractors. The anticipated ruling will be significant for any entity using independent contractors in California and may have broader implications to other companies whose business models are built on pairing customers with products and services through smartphone or Internet-based platforms. For now, employers should be aware that there is not one factor to determine independent contractor status, but that the court will look at a combination of factors, which ultimately come down to the level of control an employer exerts over the worker.

]]>https://www.employmentlawworldview.com/california-federal-court-finds-that-gig-economy-workers-are-independent-contractors-not-employees-us/feed/0daniel.pasternak@squirepb.comU.S. Department of Labor Reinstates Previously Rescinded Wage and Hour Opinion Letters (US)https://www.employmentlawworldview.com/u-s-department-of-labor-reinstates-previously-rescinded-wage-and-hour-opinion-letters-us/
https://www.employmentlawworldview.com/u-s-department-of-labor-reinstates-previously-rescinded-wage-and-hour-opinion-letters-us/#respondWed, 17 Jan 2018 14:30:30 +0000https://www.employmentlawworldview.com/?p=6328Continue Reading]]>On January 5, 2018, the Wage and Hour Division of the U.S. Department of Labor (DOL) reissued 17 advisory Opinion Letters that were published during the final months of former President George W. Bush’s administration, but were subsequently rescinded by the Obama administration. Opinion Letters do not establish new law, but instead are vehicles through which employers can ask the DOL for formal answers to specific compliance questions pertaining to the Fair Labor Standards Act (FLSA) and for the DOL to provide guidance to employers on a wide range of topics regarding oftentimes complex or perplexing wage and hour issues. Opinion Letters are intended to be “fact-specific” based on the facts presented in the individual inquiry, but the information set forth in them provide valuable insight into how the DOL interprets specific provisions of the FLSA. These interpretations are frequently cited by courts when resolving FLSA lawsuits. The Obama DOL had discontinued the practice of issuing Opinion Letters in favor of publishing more (and less helpful) Administrator Interpretations.

The reinstated letters cover a wide variety of topics. Many of the reissued Opinion Letters concern the exempt status of specific job positions in specific industries under section 13(a)(1) of the FLSA, as defined in the Part 541 of the Code of Federal Regulations. For example, some address questions about the exempt status of civilian helicopter pilots, client service managers of an insurance company, residential construction project supervisors and consultants, clinical coordinators, and business development mangers of a healthcare placement company. Of broader relevance, however, two of the reinstated Opinion Letters address inquiries about the salary basis test for exempt status, as defined in 29 C.F.R. § 541.602. Also of note is a reinstated Opinion Letter addressing on-call scheduling – FLSA2018-1 – in which the agency concluded that on-call hours of employees of an ambulance service are not compensable under the FLSA.

Other topics included in the reissued Opinion Letters include whether certain bonuses or other payments should be included in calculating employees’ regular rates of pay pursuant to section 7(e) of the FLSA, whether a plumbing repair and service business qualifies as a retail or service establishment exempt from overtime under section 7(i) of the FLSA, and whether a non-profit company and for-profit company are joint employers of volunteers of the non-profit. For a complete list of the re-issued Opinion Letters, see here.

Employers should take appropriate steps to ensure they are in compliance with reissued Opinion Letters.

Information on how to request an Opinion Letter from the DOL can be found on the DOL’s website, including what to include in an Opinion Letter request, and where to submit an Opinion Letter request. It is unlikely, however, that the DOL will issue any new Opinion Letters until the currently vacant Wage and Hour Division Administrator is in place.